UK, EU blame each other as trade talks make slow progress

U.K. and European Union officials blamed each other for failing to compromise as they made little apparent progress toward a trade accord ahead of a key deadline this week.

Speaking to a meeting of EU European affairs ministers in Luxembourg on Tuesday, the bloc’s chief negotiator, Michel Barnier, said the talks haven’t sufficiently advanced for them to enter the so-called tunnel, the intensive final phase, according to officials close to the discussion.

A spokesman for Boris Johnson responded by saying the U.K. is “ready and willing” to leave the single market without a deal, an outcome which he said “holds no fear.” The pound fell as much as 0.7% against the dollar to trade at $1.2971, the lowest since Friday.

The prime minister has threatened to walk away from the negotiations on Thursday unless he is clear an accord is possible. As discussions between U.K. and EU officials continue in Brussels, both sides agree that time is running out—but they differ on who needs to make the first concessions on fisheries, state aid, and how any agreement will be enforced, the three major obstacles to an accord.

Johnson will hold a call with European Commission President Ursula von der Leyen on Wednesday to discuss the Brexit talks, according to a person familiar with the matter.

“We are at a critical stage of the negotiations,” German Europe Minister Michael Roth told reporters before the meeting in Luxembourg. “We are extremely under pressure, time is running out, and we expect substantial progress by our friends in the U.K. in key areas.”

A British official, speaking on condition of anonymity because the talks are private, said the EU had run the clock down deliberately and now needed to up the pace and inject some creativity to save the deal. The official also expressed frustration at the EU’s position, saying the U.K. has moved a long way since the beginning of the year.

Frustration

One of the key obstacles to a deal remains what access EU boats will have to U.K. fishing waters. France is seeking the same rights it enjoys today under the EU’s Common Fisheries Policy—something the British government has rejected. On Tuesday, an official in President Emmanuel Macron’s office warned that sacrificing the country’s fishing industry to secure a wider trade accord would be out of the question.

While the tone of each side’s briefing is heating up, EU officials privately expect the U.K. to remain at the negotiating table until at least the end of this month to try and secure a deal. Failure to reach one would see Britain leave the single market and customs union at the year-end without a trade deal in place, triggering disruption and additional costs for millions of businesses and consumers already reeling from the coronavirus pandemic.

In a message on Twitter, Barnier said the EU will “continue to work for a fair deal in the coming days and weeks.”

Foreign Secretary Dominic Raab told the U.K. Parliament he is still “hopeful” the two sides can can reach an agreement by Thursday.

“Ultimately it will require the same goodwill, the same pragmatism, the same flexibility on the EU side that the U.K. and this prime minister has shown,” Raab said.

German Chancellor Angela Merkel said all sides want a deal—but it has to be in the interests of both Britain and the EU.

“An agreement is in everybody’s interest,” she told a virtual conference organized by the European Committee of the Regions on Tuesday. “But, unfortunately, we have to prepare for the possibility that there will be no agreement.”